[prestige cleaners]

just had my bill for limited co, tax bill for 2 directors, £1600! and a £500 accountants bill, chuffed as id saved up £3500.

just a few tips my accountant told me might help newbies, he said the 1st year of business for van/loan can be totally tax deductable instead of spread out, as has happened to me as the last accountant didnt do it, that way you dont lose money for depreciation of the van.

he also said to spend a bit more on tools to save money on tax.

he also said to save more money revert back to sole trader, as its not worth it for us.

[♠Winp®oClean♠]

Some conflicting advise there mate

As for writing off 100% of costs in first year, this would be totally dependent on individual circumstances & you could be worse off for doing this, especially in your first year of trading!

Spending money doesn't save any tax, you just don't pay any tax on the money you spent. If you spend money on something you don't need, then you've actually lost money!

[prestige cleaners]

obviously buy something you will use like new poles (poss 60ft carbons) pressure washer, ladders, reels, advertising, clothing, etc. speak to your accountant 1st though.

[Dave Willis]

Macmac is spot on. Yes you will reduce your tax bill but you still have to find more money to spend in the first place. You could of course buy a brand new van every year and pay no tax but you'd be skint all the time.
My accountants bill is £95 - think I have a bargain there.

[ok cleaning]

£500 accountent bill for a year is very very cheap your turn over must be very low for a ltd company

[prestige cleaners]

i dont know what would you class as low?

[dave0123]

Well to pay 1600 tax would only mean remining profits after costs of and salerys of £8000

But of course turnover and profit is alot diffrent

[prestige cleaners]

its actually about £10,500 tax free wages for both of us, thats what he told me today anyway.

[dave0123]

thats just your 5000 od grand tax free which you get as employee, we all know that

Cost of sales
Expenses Ie ( directors wages upto 5000 odd) all other business expenses

Profit
Corp tax
Divendends

Like that

[ok cleaning]

 i m a ltd company and my accountent charges £1200 a year for everyting he does all the paper and everting else necessary so £500 bill is very very low

[poleman]

he also said to save more money revert back to sole trader, as its not worth it for us.

well I would disagree as my company is LTD and to go back to sole trader I would have to buy the business back to myself, as being a director I aim employed by the company!

Someone is miss informing you mate...

Andy

[♠Winp®oClean♠]

he also said to save more money revert back to sole trader, as its not worth it for us.

well I would disagree as my company is LTD and to go back to sole trader I would have to buy the business back to myself, as being a director I aim employed by the company!

Someone is miss informing you mate...

Andy

You'll pay higher rate class 4 NI then as an employee?

[geefree]

I think he means the whole thing, ... money wise , earnings etc , his accountant prob thinks he could earn the same as a sole trader without the hassle.

[prestige cleaners]

he also said to save more money revert back to sole trader, as its not worth it for us.

well I would disagree as my company is LTD and to go back to sole trader I would have to buy the business back to myself, as being a director I aim employed by the company!

Someone is miss informing you mate...

Andy

  well if that is that is the case, how would you lose out if your paying yourself                                                                                           

[SherwoodCleaningSe]

With AIA (annual investment allowance) which is the way business investment works nowadays you can claim the whole lot in the first year and succeeding years anyway as long as it's not more than £50 000.  So even if you buy a super dooper RO and a gold plated pole as long as it's under £50 000 you don't have to spread the payments.

Simon.

[Sunshine/Cleaning]

I would have thought that along with corporation tax on profits you would still have to pay tax on any wages? That is unless you only earn £6000 or whatever the limit is. Then pay the rest in dividends and pay corporation tax on that. would you not still have to pay a personal tax on any dividends at the normal rate though?

See that I went round in circles!

[Sunshine/Cleaning]

As for buying equipment to reduce liability this is only possible out of the profits AFTER you have paid yourself and any expenses. I would imagine most use all of their profits as their wage.

[Joe Lauzon]

corporation tax is  normally around 20-22% up to few hundred thousand pounds.

Its 21% now, and our mate Cameron, has recently lowered it to 20% - although thats not in effect until after April 2011.

Completely different game to being a sole trader, you would have to be at the top of your game as a sole trader to go ltd,

At the top of your game.  Really?  Why is that? 

My accountants bill is £95 - think I have a bargain there.

Thats not a limited companies accountants bill.  He is either ripping you off or your a sole trader.



Considering the money the majority claim to be earning on this site, the majority should be running limited companies.  If your profiting less than 15k its probably not worth it.  If your earning 30k as a one man band, going limited would save you about a grand a year factoring in accountants costs.  If you earn more than that, and are not limited, well, the tax man is your biggest fan.

As Andy rightly points out you would have to buy the business from yourself, if you want to revert to being a sole trader.  You don't want to go there, so you need to be sure of your choice.  But simply put, if your taxable profits are 20k plus your almost certainly better off limited.

[Joe Lauzon]

I don't see its much of a decision Ewan.  Even if your profits are 30k, surely your mad to be a sole trader.  Your giving money away to the tax man if you stay as a sole trader.

If your an old boy about to wind down, I understand.  Otherwise, its black and white if you ask me.

[Sunshine/Cleaning]

I don't see its much of a decision Ewan.  Even if your profits are 30k, surely your mad to be a sole trader.  Your giving money away to the tax man if you stay as a sole trader.

If your an old boy about to wind down, I understand.  Otherwise, its black and white if you ask me.

When you say 'profit' do you mean after your personal wage or before you take anything?